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Remember The Phone Company? It’s Back And It’s Called Facebook

AT&T? Verizon? Maybe you said Apple or even Google, but I bet Facebook didn’t come to mind. Yet, that’s exactly who the Atlantic called out in an article last week (along with Apple), and they’re right. According to the author, 60% of Facebook’s revenue comes from mobile ads, double that of the prior year.

As Facebook’s mobile ad revenue attests, marketers are stepping up their “phone based” spending. Unfortunately, many of these professionals are doing so with a desktop mindset more akin to 2004 than 2014. In order for them to take full advantage of Facebook the phone company, they will have to abandon traditional online marketing conventions.

There’s a fundamental difference between the behavior of someone utilizing a mobile device and someone sitting at a desktop computer. For instance, consumers can effortlessly click on a desktop Facebook ad, surf a site to learn more and then execute a purchase or fill out a lead form, via their large screen, mouse and full-sized keyboard.

Now consider the same experience from a mobile point of view. Staring at a small screen and a nearly non-existent keyboard, most consumers bail before attempting to enter their 16-digit credit card number, let alone their billing information.

Agreed, this ain’t a news flash. In fact, it’s patently obvious, which makes it even more shocking that many digital ad executives do such a poor job of prompting mobile engagement and conversions.

Instead of foisting antiquated conversion funnels on mobile users, advertisers should offer consumers what they want – the opportunity to transact (or learn more) with a single click. Digital marketers, Captain Obvious just called and he asked that you please allow us to respond to your mobile ads in an intuitive and impactful way, by calling you directly from our devices.

But Why Now?

OK, if this is so obvious, why are digital marketers just now figuring it out? One historical fear was that click-to-call ads would generate a flood of low quality calls and increase the call center’s overhead. In addition, marketers have traditionally lacked adequate visibility into the customer’s experience, making it impossible to associate a user’s online experience with their offline call. Once a user clicked on a phone number and initiated a conversation, their online session “ended” and their subsequent offline purchase wasn’t attributed to the ad that initiated the call.

Voice-centric marketing automation solutions are helping marketers overcome these challenges. These platforms, including Invoca’s, provide advertisers with sophisticated quality controls and bulletproof tracking which makes these concerns a legacy of the desktop era. (Note: I am an Invoca investor via Rincon Venture Partners).

Fortunately for consumers, not all mobile advertisers are clueless. The growth in mobile as an advertising platform is driving more consumer-to-businesses calls than ever before. BIA/Kelsey reports that from 2011 to 2013 there was a 133% increase in the number of mobile phone calls to businesses. According to Google, 61% of mobile searches result in a phone call. Invoca’s CEO, Jason Spievak, also confirmed this trend, reporting that, “80% of the calls running through our platform are triggered by mobile ads, which are converting at a 2x rate over comparable click-to-buy ads.”

Given that calls convert at significantly higher rates than leads coming from website forms, forward-looking marketers are re-architecting their discovery and purchase flows from a mobile-first perspective. Instead of creating a slightly modified desktop path for mobile consumers, they are crafting unique mobile experiences that tap into users’ online and offline behaviors.

It may not be your Father’s phone company, but nevertheless, Facebook represents the phone company of the future. The sooner advertisers figure this out, the faster they will see their revenues ramp, right alongside those of the new Ma Bell.

Follow my startup-oriented Twitter feed here: @johngreathouse. I’ll never tweet about your dad’s phone company or that killer burrito I am about to devour – just startup stuff.

Image of Captain Obvious: Courtesy of Hotels.com

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.